Who Pays, Who Profits ...when Campaigns are Funded by Wall Street
January 15, 2010
In a January 14 blog post also run on the Huffington Post site (“Why Obama Must Take On Wall Street”), former labor secretary Robert Reich (a Clinton appointee and eventual economic adviser and major supporter of the Obama campaign) laments that practically nothing has been done in the past year and a quarter to keep the 2008 worldwide economic crisis from happening all over again. No restrictions have been applied to keep Wall Street from gambling on wild bets like the ones that led to the crisis, and the biggest players (Citigroup, Bank of America, JPMorgan Chase, Goldman Sachs, and Morgan Stanley) have been told they’re “too big to fail.” Reich argues that such a guarantee they’ll be “bailed out [again] by taxpayers if they get into trouble” gives these institutions “every incentive to make even riskier bets.”
Reich goes on to discuss the many loopholes and limits of the proposed House “Wall Street Reform” bill; the lack of desire among lawmakers to reinstate “the wall that used to exist between commercial and investment banking” that was dismantled by 1999 deregulation; and Washington’s refusal to consider new antitrust laws that would break up the biggest players on Wall Street.
Why has our government failed to do anything to truly safeguard our long-term economic stability? The most significant obstacle, Reich states bluntly, is the “grip Wall Street has over the American political process.” According to Reich, From January through September of last year, the financial industry spent an incredible $344 million on lobbying Washington. In addition to that, Wall Street “firms and executives” paid $42 million in a one-year period (November 2008-November 2009) directly to legislators, “mostly to members of the House and Senate banking committees and House and Senate leaders.”
What is wrong with this picture? How can our legislators be expected to pass laws that are best for their constituents when they—our elected officials—have campaign coffers full of money from special interests?
It’s no secret that highly successful fundraisers are considered rising stars in their political parties. In a January 12 Denver 9News piece, local political analyst Floyd Ciruli was quoted as saying he believes Denver mayor John Hickenlooper (who was recently endorsed by Secretary of the Interior Ken Salazar and by President Obama) is an ideal Democratic candidate for the upcoming race for the Colorado governorship in part because “he is a very good fundraiser.” Our January 12 “Coloradoized” version (see below) of a New York Times piece on the New York State U.S. Senate race references the widely recognized—and lauded—fundraising efforts of current junior U.S. senators Kirsten Gillibrand of New York and Michael Bennet of Colorado: While Bennet raised more than $3 million in the first nine months of last year alone for this year’s campaign, Gillibrand has reportedly raised a to-date total of $7 million.
It’s disturbing enough that candidates seem to be judged by their parties primarily on how much money they can raise. But it’s especially disturbing when campaign fundraising figures are touted without any discussion of who contributes the largest sums and what those donors receive for such impressive contributions/investments.
As a Colorado-based initiative, Imagine A Great Election will continue to focus on 2010 statewide races for Colorado governor and for the U.S. Senate seat currently held by appointed senator Michael Bennet. In our coverage, we will analyze not just the amount of money candidates from both major parties raise, but the specific sources of significant (and often game-changing) contributions as well as what donors get for such contributions/investments. We will also follow selected national races on the same basis.
As for the many salient points raised by Reich, our May 2009 Know Something Project review of political and economic critic Kevin Phillips’ book, Bad Money, notes that Phillips agrees that Wall Street has a tight grip on Washington. During the 2008 presidential campaign, he states, Wall Street proved it had “shifted its chips” to the Democratic Party by making the donations necessary to ensure an “acceptable” administration was put in power.
It has become clear that the majority of elected officials in Washington do not have the courage to institute real change, so the voters have no choice but to educate themselves and change those elected officials who refuse to represent their constituents.
To assist the voter in learning about their elected officials’ actions, not words, we will ask and answer two simple questions: